Foreclosure drop may not mean better economy

Sunday Times Newspapers

The number of foreclosed houses in Wayne County is on the decline, a regional agency says.

A recent report by the Southeastern Michigan Council of Governments found that foreclosures in southeastern Michigan fell by 4 percent in the fourth quarter of 2010.

Throughout the region, the number of foreclosed houses dropped from 7,847 in the third quarter to 7,525 in the fourth, according to a SEMCOG press release. Fourth-quarter numbers also are down 38 percent from the end of 2009.

SEMCOG spokesman Jeff Nutting said the decline could mean that most homes susceptible to foreclosure already have begun the foreclosure process.

“I don’t think it’s related to an improvement in the economy,” Nutting said. “The foreclosure crisis hits first in the city and the surrounding suburbs, so more of the housing that was vulnerable to foreclosure has already entered that process.”

In Wayne County, 16,291 new foreclosures were reported in 2010. Nearly half of those — 7,555 — occurred in Detroit. Almost one in 33 homes in Wayne County had been foreclosed last year, the highest rate in southeastern Michigan.

Though the foreclosure rate in Wayne County has dropped, the number of foreclosed houses in the county is declining at a slower rate, Nutting said. In 2009, there were 35,414 units, while in 2010 that number had fallen to 24,461.

Wayne County’s foreclosure totals translate to a loss of over $45,483,000 in property taxes across the county. More than $24,244,000 of that money was Wayne County excluding Detroit.

To help unload the foreclosed homes, some communities, like Wyandotte, are turning to the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, which provides funding for communities to buy, renovate and sell foreclosed houses in order to bring in tax revenue to the cities.

Wyandotte is in the second phase of its NSP program after remodeling two houses in the fall.